Oil price up again by Claudia Sonea

U.S is still in danger of an economic recession in spite of tax rebates and a possible increase of power of the dollar. The situation is pretty dark and it all cuts down to oil price. Since last year there is a problem with a sluggish house market, a credit crisis, but mostly the price of oil kept on soaring generated an increase in goods prices and a low period of sales for retailers.
As usual the oil rose this week and it is only at the beginning. On Monday it closed at $145 a barrel on the New York Mercantile Exchange after fluctuating between $142 and $146. Yet, this is not that bad as on Friday there was established an all time record of $147.27.
Bad news for drivers as the gas pump priced reached a record- when they will want to fill the car, they will discover that the gallon is $4.11, while diesel prices will show $4.824. The figures were presented by the club AAA, the Oil Price Information Service and Wright Express and do not confirm the analysts prediction that in fact the soaring will actually cool down this summer. They can keep on hoping considering that President Bush canceled the executive ban that was installed on offshore oil drilling.
A solution to the problem would be that the lifting of the main Congressional prohibition and show that USA is committed in producing oil because the supplies coming from Brazil, Iran and Nigeria continue to represent a concern. For instance, Brazil has to deal with the strike of 25000 workers of in Brazil's Campos Basin (80 percent of the Brazilian output) so that Petrobras give them an extra day off once in two weeks, at the end of the shifts on the platforms. Another story is with Iran which is in danger of creating an international conflict due to its nuclear program that determined USA and Israel to make something against them.
The dollar is another side of the problem as it has lost ground against foreign currencies and investors focus on dollar-denominated crude contracts. If the dollar would regain its strength, then such purchases would become rare. On European markets oil fell and in London it even reached $143.



related story: http://news.yahoo.com/s/ap/20080714/ap_on_bi_ge/oil_prices;_ylt=At5FOdQdzRDWXl5.mP2MBBCs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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